§ 30-2-14-37 — Asset backed securities

(a) As used in this section, "asset backed
security" means an asset whose value is based upon the right it gives
the owner to receive distributions from the proceeds of financial assets
that provide collateral for the security. The term includes an asset that
gives the owner the right to receive from the collateral financial assets
only the interest or other current return or only the proceeds other than
interest or current return. The term does not include an asset to which
section 23 or section 31 of this chapter applies.
(b) If a trust receives a payment from interest or other current return
and from other proceeds of the collateral financial assets, the trustee
shall allocate to income the portion of the payment that the payer
identifies as being from interest or other current return and shall
allocate the balance of the payment to principal.
(c) If a trust receives one (1) or more payments in exchange for the
trust's entire interest in an asset backed security in one (1) accounting
period, the trustee shall allocate the payments to principal. If a payment
is one (1) of a series of payments that will result in the liquidation of
the trust's interest in the security over more than one (1) accounting
period, the trustee shall allocate ten percent (10%) of the payment to
income and the balance to principal.

Legislative History

As added by P.L.84-2002, SEC.2.